Mary Butler (Waterford, Fianna Fail) | Oireachtas source

I propose to take Questions Nos. 35 and 47 together.

Like many other sectors of the economy, the construction sector was impacted by the Covid-19 pandemic. This resulted in construction-related work on the site of the new children's hospital stopping on 31 March due to Covid-19 restrictions. On 18 May, the restrictions in respect of the construction sector were eased. From this date, the National Paediatric Hospital Development Board, NPHDB, engaged with the main contractor to ensure the earliest possible reopening of the sites. I am informed the main contractor of the new children's hospital project returned to the site on 13 July.

There will be delays associated with Covid-19, but it is too early to assess fully the impact of the pandemic on the new children's hospital project and the paediatric outpatient and urgent care centre at Tallaght Hospital. The NPHDB continues to engage with the contractor and is monitoring progress on site in the interests of completing the project as quickly and economically as possible.

On that note, I want to say I am acutely aware of how urgently the new children's hospital is needed and I want to see it delivered as quickly as possible on behalf of children, young people and their families. I have no doubt the Deputies share that view; we have waited far too long for this hospital. Under the contract, the new children's hospital is due to be completed by the end of 2022 and handed over to Children's Health Ireland to be opened in 2023 after a period of commissioning. I am advised that as of March 2020, when the site closed due to Covid-19, the NPHDB was of the view that the main contractor was behind schedule on the construction works.

The NPHDB is continuing to engage with the main contractor to obtain an updated programme of works that is in line with its contractual commitments. Any delivery outside of the timelines agreed under the contract could be a matter for dispute resolution, so I wish to be careful in respect of what I say here, but I reiterate that it is a priority of the Minister and the Government that the hospital be completed as quickly as possible.

The €1.73 billion figure mentioned by Deputy Daly is the total overall project cost advised to the previous Government in December 2018. That figure comprises €1.43 billion, which is the overall cost to complete the capital project, and also a broader programme of activity associated with the integration and transfer of the services of the three children's hospitals to the new site under development. This includes, for example, investment in ICT, an electronic health record system and the children's hospital integration programme, which is the merging of the three paediatric hospitals.

The PwC report makes clear that the guaranteed maximum price established through the two-stage tender process does not provide a contractual ceiling on cost, and that significant residual risks of further cost remain. The residual risks, for which there cannot be cost certainty, include items such as construction inflation, claims and certain uncontrollable risks, such as potential costs relating to Brexit. I am advised the main contractor has submitted a significant number of claims that it alleges are outside of the agreed scope. The NPHDB has a robust process in place for the assessment of claims by the contractor in accordance with the construction contract. This process is a commercially sensitive one between the contractor and the board.

An instruction to commence with phase B, above ground works, was issued to the main contractor in January 2019. In February 2019, the main contractor informed the NPHDB that it was disputing the validity of that instruction. As the matter is now before the courts, it would be inappropriate to comment further at this stage, even as regards the legal fees. I will, however, outline the legal fees in my follow-up response.

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